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ECCB ANNUAL REPORT 2016/2017
EASTERN CARIBBEAN CENTRAL BANK
NOTES TO THE FINANCIAL STATEMENTS
(expressed in Eastern Caribbean dollars)
March 31, 2017
Eastern Caribbean Central ank
Notes to the Financial Statements
March 31, 2017
(expressed in Eastern Caribbean dollars)
3. Financial risk management
…continued
b)
Credit risk
…continued
Credit risk measurement and mitigation policies
Available-for-sale investment securities
and money market instruments and money at
call…
continued
The Bank manages credit risk by placing limits on its exposure to governments, international
institutions and U.S. government agencies. It places limits on the amount of risk accepted in
relation to one borrower and country. Such risks are monitored on a revolving basis and subject to
an annual or more frequent review.
The investment guidelines, which are approved by the Board of Directors, stipulate the limits on
the level of credit risk by borrower, product, industry, sector and country. They also stipulate the
minimum required ratings issued by Moody’s or another recognized rating agency for its
international investments. The Bank further manages this risk by ensuring that business is only
conducted with its approved banks and by monitoring those ban
ks’ deposi
t ratings via rating
agencies. The global custodian is also monitored daily and periodically reviewed.
The table below presents an analysis of the Bank’s foreign debt securities (note 8)
and money
market instruments and money at call (note 5) by rating agency designation at March 31, 2017 and
March 31, 2016
, based on Moody’s or equivalent:
Available-for-sale securities
2017
2016
Rated (Moody’s)
Foreign securities
$
$
Aaa
2,400,625,937
2,520,651,084
Aa1
195,307,908
84,600,423
Aa2
288,930,558
187,880,936
Aa3
43,737,351
51,208,463
A1
-
5,421,816
2,928,601,754
2,849,762,722
2017
2016
Unrated
$
$
Domestic securities
624,186
421,686
624,186
421,686